Council Tax Rules Are Changing in 2026 — What the New 63-Day Rule Means

From later this year, the rules on council tax arrears are changing in England. Instead of losing the right to pay your council tax in instalments after a single missed payment, you will get three missed payments and at least 63 days before that happens — and the court costs councils can add are being capped at £100. Here is a plain-English guide to the reform, why it is happening, and where to get free help if you are behind.

What is changing under the 2026 council tax reform

In April 2026, the Ministry of Housing, Communities and Local Government (MHCLG) confirmed major changes to how council tax debt is collected, following a public consultation. The headline change concerns the point at which a council can demand your entire annual bill at once — a process known as losing the right to instalments.

Under the current rules, missing just one monthly instalment can start a chain of events: the council issues a reminder, and if the arrears are not cleared quickly, you can lose the right to pay monthly and be asked for the whole year's balance. If that goes unpaid, the council applies to the magistrates' court for a liability order, adding court costs to what you owe and opening the door to enforcement agents (bailiffs).

The reform changes the early stages of that process significantly:

• The grace period is extended from 1 missed payment to 3, with a minimum of 63 days before you lose the right to pay in instalments. That gives households far more time to catch up before the debt escalates to the full annual amount.
• A new £100 cap on liability order costs. These court-stage charges were previously uncapped and varied widely between councils — sometimes adding well over £100 to a debt. Capping them stops the cost of collection from inflating what households owe.

Why the council tax rules are being changed

The reform comes against a backdrop of sharply rising arrears. Total council tax arrears across Britain now stand at around £8.3 billion — up roughly 79% over five years, according to analysis by Debt Justice of MHCLG figures.

At the same time, bills have climbed. The average Band D council tax bill in England for 2026–27 is around £2,392. For a household already stretched, falling a single month behind could previously trigger a demand for that full amount plus court costs — a sum few people in financial difficulty can find at short notice. The government's stated aim is to give people realistic breathing space to get back on track, and to stop enforcement costs from compounding the problem.

Is council tax a priority debt?

Yes. Council tax is classed as a priority debt, which means the consequences of not paying are more serious than for most consumer debts — ultimately including enforcement agents and, in rare cases, committal proceedings. That is why it is important to deal with council tax arrears before non-priority debts such as credit cards or unsecured loans. The new rules give you more time, but they do not write off what is owed.

What to do if you are behind on council tax

If you have missed a council tax payment, the single most useful step is to contact your council early. Councils can usually agree a realistic repayment arrangement, and they would generally rather recover the money over time than pursue costly enforcement. Ask whether you can spread the balance over 12 months rather than the standard 10, and check whether you qualify for a Council Tax Reduction or any discounts (for example, the single-person discount).

It is also worth getting free, independent advice before you agree to anything, so you understand how council tax fits with the rest of your budget. If your council tax difficulty is part of a wider debt problem, a regulated adviser can talk through formal options such as a Debt Management Plan, a Debt Relief Order, an IVA or, in some cases, bankruptcy — and help you work out which, if any, is appropriate.